State officials are warning tax payers — and preparers — to protect their computer against tax-based and IRS-based scams.Last month, state Attorney General Josh Shapiro warned residents against scammers who pose as IRS agents looking to collect debts, but now officials are reminding residents that scammers all attempt to file taxes and collect refunds.“Cyber criminals are always working to develop news schemes that will allow them to profit by stealing sensitive information from hard-working people,” Revenue Secretary Dan Hassell said in a news release Monday. “… This is a good time for people to think about ways that they can protect themselves.”The IRS recently advised state officials that scammers will steal client data from tax professionals and use that data to file fraudulent tax returns. It is a form of identity theft that enables the scammers to collect taxpayers’ refunds.A new twist is getting those refunds sent to the correct person, but then threatening the taxpayer by phone into returning the refunds — forwarding the money to the scammer, sometimes as gift cards.Tips from the state department of revenue and the IRS to avoid scams:*Tax collection agencies do not call demanding immediate payment.*Do not trust caller ID numbers even if they claim to come from the IRS as technically adept scammers can “spoof” the caller ID into believing the call is from the IRS.* Educate yourself about scams which seek personal information.* Think twice before opening email attachments or links.* Use unique, strong passwords and different passwords for each account.* Keep updated security software to protect against malware, viruses and phishing scams.* Hold the cursor over links without clicking — it will bring up the web address of the link — and if you don’t recognize the destination, don’t [email protected] @coughlinreports610-820-6564 Continue Reading

PHOENIX (AP) — The association that represents Arizona's cities and towns is raising the alarm about a proposal in the Legislature to ban sales tax on digital goods such as cloud computing software and digital streaming services.The League of Arizona Cities and Towns says the proposal from Republican Rep. Michelle Ugenti-Rita would cost cities $48 million a year in tax collections and the state $120 million. Another $11.3 million would be lost from a fund for schools.Ugenti-Rita said Monday the state has no authority to impose sales tax on software and other services accessed over the internet when there is no actual good delivered. She says the League and state Revenue Department could have sought that authority but instead just collected the taxes."This is a field that nobody should have been operating in to begin with, unless they did the right thing, which was to come down to the Legislature and pass policy reflective of what they want their tax environment to look like," she said. "But no one's done that — the department hasn't done that, the League hasn't done that. This could have been fixed a long time ago. This is a giant mess; we are ripe for legal action if we don't fix this."League President Ken Strobeck said there is authority to collect the taxes and cities and the state will be sorely hurt by Ugenti-Rita's legislation."If you go to Best Buy and buy a copy of TurboTax on disc you pay sales tax. If you download it from the internet and put it on your computer, you pay sales tax," Strobeck said. "Under this bill, if you used it online, even if you were preparing your tax returns and still had a tangible product at the end, it would not be taxed. And so why wouldn't everybody just gravitate toward that platform?"Strobeck argues that there are lots of items not singled out in the tax code that are taxed — such as hammers, paint cans and brooms."But we have a category of retail products, that are tangible retail products that are taxable, Continue Reading

provided by Published 9:00 am, Friday, February 23, 2018 MoneyTips Formed in 2003, IRS Free File is the product of a partnership between the Internal Revenue Service and a group of twelve online tax software suppliers that form the Free File Alliance – including such familiar names as TaxSlayer and H&R Block. Free File was intended to increase electronic filing by making the process easier for a greater number of Americans. Both the tax preparation and the e-filing process are free. "You don't have to be an expert on taxes," says IRS Commissioner John A. Koskinen. "Free File software can help walk you through the steps and help you get it right." Over 50 million tax returns have been filed through the Free File system to date. You can use the Free File software if your Adjusted Gross Income (AGI) was $66,000 or less for the 2017 tax year. An estimated 70% of American taxpayers fall within this criteria. Taxpayers with an AGI of above $66,000 don't have access to the software, but may use the electronic Free File Fillable forms available on the IRS website. You will need to gather up a few things before starting the Free File process, just as you would with any filing format. Personal Information– You will need a copy of your tax return for the previous year and valid Social Security numbers for you, your spouse, and your children. Income and Records – Gather all receipts and summary forms pertaining to your income. These include W-2s, all varieties of Form 1099, and the newer forms brought in by the Affordable Care Act (ACA). Depending on your status, you may need Form 1095A (Health Insurance Marketplace Statement), Form 8962 (Premium Tax Credit) or Form 8965 (Health Coverage Exemption). The penalty for failing to purchase healthcare insurance is still in effect for tax years 2017 and 2018, but will be gone from 2019 onwards, thanks to the Tax Cuts and Jobs Act. Don't forget to include any other income such as unemployment Continue Reading

It's time to start thinking about your 2017 taxes and assessing whether you'll go it alone or hire someone to help prepare and file your return with the Internal Revenue Service. Photo Credit: AP/Susan Walsh By Sheryl Nance-Nash Special to Newsday Updated January 27, 2018 6:00 AM Some tasks you handle yourself to save money and to get the job done without waiting for an appointment. When it comes to preparing your tax return though, should you DIY or hire a pro? “If your income and filing status don’t change much from year to year, then you might be OK doing your own taxes a bit longer,” says Joshua Zimmelman, president of Westwood Tax & Consulting in Rockville Centre. You’re also a good candidate to do your own return if you’re single, with no dependents and only one steady source of income, because your taxes will probably be pretty straightforward. If you are computer savvy, you’ll be up for keeping track of your receipts and statements digitally and using tax preparation software. “Do your homework and be sure it is a reputable program,” advises Leslie Tayne, a Melville lawyer specializing in financial issues. Often, change triggers hiring someone. If you started a new business or expanded your company, your financials might look different than they did in 2016. If you got married, divorced, became widowed or had a child, there might be major changes to your filing status or allowed deductions. “If you’re not sure what all these changes mean for your tax return, there’s no reason to risk doing it wrong,” says Zimmelman. When you don’t understand the changes in the new tax laws, it’s a good time to ask for outside help. Ask people you know and trust for a referral. You can get an enrolled agent, accountant or CPA. Says Dennis Klein, a CPA and partner with Nussbaum Yates Berg Klein & Wolpow, LLP in Melville, “The bottom line — you want Continue Reading

It's time to start thinking about your 2017 taxes and assessing whether you'll go it alone or hire someone to help prepare and file your return with the Internal Revenue Service. Photo Credit: AP/Susan Walsh By Sheryl Nance-Nash Special to Newsday Updated January 27, 2018 6:00 AM Some tasks you handle yourself to save money and to get the job done without waiting for an appointment. When it comes to preparing your tax return though, should you DIY or hire a pro? “If your income and filing status don’t change much from year to year, then you might be OK doing your own taxes a bit longer,” says Joshua Zimmelman, president of Westwood Tax & Consulting in Rockville Centre. You’re also a good candidate to do your own return if you’re single, with no dependents and only one steady source of income, because your taxes will probably be pretty straightforward. If you are computer savvy, you’ll be up for keeping track of your receipts and statements digitally and using tax preparation software. “Do your homework and be sure it is a reputable program,” advises Leslie Tayne, a Melville lawyer specializing in financial issues. Often, change triggers hiring someone. If you started a new business or expanded your company, your financials might look different than they did in 2016. If you got married, divorced, became widowed or had a child, there might be major changes to your filing status or allowed deductions. “If you’re not sure what all these changes mean for your tax return, there’s no reason to risk doing it wrong,” says Zimmelman. When you don’t understand the changes in the new tax laws, it’s a good time to ask for outside help. Ask people you know and trust for a referral. You can get an enrolled agent, accountant or CPA. Says Dennis Klein, a CPA and partner with Nussbaum Yates Berg Klein & Wolpow, LLP in Melville, “The bottom line — you want Continue Reading

There are lots of things that scare many people: snakes, public speaking, needles, trips to the dentist... and the thought of having your tax return audited by the Internal Revenue Service (IRS). When it comes to tax audits, there's good news and even better news: The odds of getting audited are quite low -- and you can make your odds of being audited even lower. Here's a look at your likelihood of getting audited and seven ways to avoid a tax audit. Image source: Getty Images. An IRS tax audit: The odds are very low How often do people get audited? Here's some information from the horse's mouth: According to the 2016 IRS data book, there were about 148 million individual tax returns filed in 2015. Of those, a sizable 1.2 million ended up "examined" -- i.e. audited. In other words, less than 1% -- a mere 0.8% -- of the returns were audited. Your odds are likely to get even better without your ever doing anything, too. That's because Congress has been cutting the IRS's budget repeatedly over many years. IRS Commissioner John Koskinen noted that the agency has had its headcount reduced by more than 5,000 people since 2010, noting that those are the people "who audit returns and perform collection activities, as well as... investigate stolen identity refund fraud and other tax-related crimes." He added: As you might imagine, these staffing losses have translated into a steady decline in the number of individual audits over the past six years. Last year, in fact, we completed the fewest audits in a decade.... That trend line of fewer audits will continue this year. Don't be too quick to applaud IRS budget cuts, though, because the agency generates far more money than it uses, so fewer audits mean fewer dollars collected that were due to the government. Koskinen observed that, "... historical collection results suggest that the government is forgoing more than $5 billion a year in enforcement revenue, just to achieve budget savings of a few hundred Continue Reading

The U.S. Supreme Court on Friday agreed to decide whether to let states require online retailers to collect billions of dollars in sales tax, taking up South Dakota's dispute with three e-commerce companies. South Dakota, appealing a lower court decision that favored Wayfair Inc., Overstock.com Inc and Newegg Inc., is asking the justices to overturn a 1992 Supreme Court ruling that companies with no physical presence in a state are not required to collect a state sales tax on purchases. Some online retailers, including leading player Amazon.com Inc, already collect state sales tax but others do not. The U.S. Government Accountability Office estimated in a November report that states and municipalities could gain between $8 billion and $13 billion in annual revenue if they could require online retailers to collect sales tax. Forty-five of the 50 states have a statewide sales tax. Traditional retail industry groups argue that e-commerce businesses have an unfair advantage over brick-and-mortar competitors by being able to avoid collecting sales tax. Various trade groups and 35 states had urged the high court to take up South Dakota's appeal. "Retail is a dynamic industry that's rapidly transforming. Unfortunately, antiquated sales tax collection rules have resulted in an uneven playing field that's making it harder for Main Street retailers to compete in today's digital economy," said Matthew Shay, president of the National Retail Federation trade group. South Dakota has no state income tax and relies heavily on sales taxes to fill state coffers. The state enacted a law requiring out-of-state retailers to collect sales tax in 2016, knowing that the move would provoke a legal battle. The state estimates that in the current fiscal year it would fail to collect around $50 million in revenue that it would be able to obtain if it could force online retailers to collect sales tax. "These taxes fund education, public safety and the innumerable services that state governments Continue Reading

WASHINGTON -- The Supreme Court agreed Friday to reconsider one of the most contentious issues in the business world: whether online retailers must collect sales taxes.By taking on a law passed by South Dakota's legislature for the express purpose of testing its legality, the court will return to an issue it addressed 25 and 50 years ago, before consumers did nearly 10% of their shopping on the internet.The clear signal from the justices is that they may be ready to reverse themselves and demand that online retailers collect and remit sales taxes, even in states where they have no physical presence.That would be a victory for states and traditional businesses, but a defeat for smaller online retailers who claim they cannot navigate dozens of state sales tax systems the way major players such as Amazon do.“Retailers have supported this case since the beginning and believe it is the right case to correct the constitutional course set more than 50 years ago -- well before the advent of e-commerce -- that today gives online-only retailers an unfair commercial advantage at the expense of local retailers,” said Retail Litigation Center president Deborah White.Even though 17 of the top 18 online retailers have begun collecting sales taxes, states project that they could lose $34 billion this year. The Government Accountability Office estimated in November that requiring "remote sellers" to collect sales taxes would produce a lesser amount of $8 billion to $13 billion."No one could have foreseen in 1992 the ways that internet retail would remake the American economy in 2017," South Dakota argued in court papers."This court must take account of how its own, outdated precedent has played a part in that development, pushing economic activity (and important entry-level jobs) from Main Street to distant tech companies, with a tangible effect on everyday American life."States have enacted a variety of laws in hope of collecting Continue Reading

HARRISBURG, Pa. (AP) — Another bad month of tax collections is deepening the state government's budget hole, pushing its revenue shortfall to more than $1 billion for a fiscal year that ends in nine weeks.The Department of Revenue said Monday that April's tax collections came in at $537 million, or 13 percent, below expectations.The growing gap could put more pressure on Democratic Gov. Tom Wolf to accept spending cuts or the Republican-controlled Legislature to raise taxes as they prepare a budget plan for the fiscal year starting July 1. Wolf's proposed budget is $32.3 billion. READ: Impact of small businesses goes beyond sales figures (column) READ: Database: How much are you paying for police? READ: We must learn from the vape tax mistake (column) Allegheny County Rep. Joseph Markosek, the ranking Democrat on the House Appropriations Committee, said in a memo to his fellow House Democrats that April's shortfall must serve as a wake-up call.In January, the Legislature's nonpartisan Independent Fiscal Office projected a shortfall of nearly $3 billion through next summer. But April's results would push that shortfall to more than $3 billion. READ: Trim your tax burden by deducting phone, Internet bills The Department of Revenue attributed the shortfall, in part, to the U.S. economy recording its slowest quarter in three years.It also said April's shortfall was influenced by a change in law that shifted the due date for corporate net income tax from April to May. But even that shift would recapture only $200 million in May, according to legislative officials, still leaving the fiscal year's shortfall in excess of $1 billion.To help balance the budget, Wolf has eliminated several thousand positions in government and ordered the closure of the Pittsburgh State Prison, while proposing potentially touchy cuts to pharmaceutical reimbursements, school busing aid and grant money for the University of Pennsylvania's Continue Reading

Death and taxes, as the saying goes, are the only two certainties in life. But another, if lesser, certainty centers around the same types of basic tax questions popping up each year. As the 2016 tax-return filing season nears, here are answers to some common tax queries:Not a whole lot, at least compared to prior tax years. Legislation passed in late 2015 made several expiring provisions permanent, including the option of deducting state and local income taxes and a provision that allows seniors to donate IRA withdrawals to charities without having to declare them as taxable income. Some numbers changed too, such as the personal exemption deduction rising to $4,050 from $4,000.It's worth noting that the normal tax filing deadline this year is April 18, three days later than usual, and the Internal Revenue Service said it won't begin issuing refunds before Feb. 15 on returns that claim the earned income tax credit or the additional child tax credit.Much bigger tax changes await for 2017 if president-elect Donald Trump and Republicans in Congress carry through on their plans to cut income-tax rates, increase the standard deduction and make other notable moves that could affect most individual filers.The answer depends on a person's gross income, filing status and age. For most full-time workers, the answer is yes. For others, especially those 65 and over, it's a bit trickier.For example, if you're under 65, you must file if your gross income last year was at least $10,350 (singles) or $20,700 (married filed jointly). If you're 65 and single, you file with gross income of at least $11,900. Married couples file if one spouse is 65 or over with joint income of at least $21,950, or if both spouses have reached 65 with income of at least $23,200.Internal Revenue Service Publication 17, available at irs.gov, provides details. The IRS website also has an online questionnaire to guide you through Continue Reading